Old Republic International (ORI) and Cincinnati Financial (CINF) Financial Contrast

Cincinnati Financial (NASDAQ: CINF) and Old Republic International (NYSE:ORI) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, profitability, valuation, risk, earnings, institutional ownership and dividends.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Cincinnati Financial and Old Republic International, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cincinnati Financial 0 3 0 0 2.00
Old Republic International 0 0 1 1 3.50

Cincinnati Financial presently has a consensus price target of $71.00, indicating a potential downside of 1.89%. Old Republic International has a consensus price target of $25.00, indicating a potential upside of 19.05%. Given Old Republic International’s stronger consensus rating and higher probable upside, analysts plainly believe Old Republic International is more favorable than Cincinnati Financial.

Risk & Volatility

Cincinnati Financial has a beta of 0.84, meaning that its share price is 16% less volatile than the S&P 500. Comparatively, Old Republic International has a beta of 1.25, meaning that its share price is 25% more volatile than the S&P 500.

Valuation & Earnings

This table compares Cincinnati Financial and Old Republic International’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cincinnati Financial $5.73 billion 2.07 $1.05 billion $2.74 26.41
Old Republic International $6.26 billion 0.90 $560.60 million $1.11 18.92

Cincinnati Financial has higher earnings, but lower revenue than Old Republic International. Old Republic International is trading at a lower price-to-earnings ratio than Cincinnati Financial, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

63.3% of Cincinnati Financial shares are owned by institutional investors. Comparatively, 73.5% of Old Republic International shares are owned by institutional investors. 7.1% of Cincinnati Financial shares are owned by insiders. Comparatively, 2.0% of Old Republic International shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

Cincinnati Financial pays an annual dividend of $2.12 per share and has a dividend yield of 2.9%. Old Republic International pays an annual dividend of $0.78 per share and has a dividend yield of 3.7%. Cincinnati Financial pays out 77.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Old Republic International pays out 70.3% of its earnings in the form of a dividend. Cincinnati Financial has raised its dividend for 57 consecutive years and Old Republic International has raised its dividend for 36 consecutive years. Old Republic International is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Cincinnati Financial and Old Republic International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cincinnati Financial 18.23% 5.99% 2.13%
Old Republic International 8.95% 6.80% 1.64%

Summary

Old Republic International beats Cincinnati Financial on 10 of the 18 factors compared between the two stocks.

About Cincinnati Financial

Cincinnati Financial Corporation provides property casualty insurance products in the United States. The company operates in five segments: Commercial Lines Insurance, Personal Lines Insurance, Excess and Surplus Lines Insurance, Life Insurance, and Investments. The Commercial Lines Insurance segment provides coverage for commercial casualty, commercial property, commercial auto, and workers' compensation. It also offers director and officer liability insurance, contract and commercial surety bonds, and fidelity bonds; coverage for property, liability, and business interruption; and machinery and equipment coverage. The Personal Lines Insurance segment provides personal auto insurance; homeowners insurance; and dwelling fire, inland marine, personal umbrella liability, and watercraft coverages to individuals. The Excess and Surplus Lines Insurance segment offers commercial casualty insurance that covers businesses for third-party liability from accidents occurring on their premises or arising out of their operations, such as injuries sustained from products; and commercial property insurance, which insures buildings, inventory, equipment, and business income from loss or damage due to causes, such as fire, wind, hail, water, theft, and vandalism. The Life Insurance segment provides term life insurance products; universal life insurance products; worksite products, such as term life, whole life, and disability insurance offered to employees through their employer; and whole life insurance products, as well as markets disability income insurance, deferred annuities, and immediate annuities. The Investments segment invests in fixed-maturity investments, including taxable and tax-exempt bonds, and redeemable preferred stocks; and equity investments comprising common and nonredeemable preferred stocks. The company also offers commercial leasing and financing services. Cincinnati Financial Corporation was founded in 1950 and is headquartered in Fairfield, Ohio.

About Old Republic International

Old Republic International Corporation, through its subsidiaries, engages in the insurance underwriting and related services business primarily in the United States and Canada. The company operates through three segments: General Insurance Group, Title Insurance Group, and the Republic Financial Indemnity Group Run-off Business. The General Insurance Group segment offers automobile extended warranty, aviation, commercial automobile, commercial multi-peril, general liability, home warranty, inland marine, travel accident, and workers' compensation insurance products; and financial indemnity products for specialty coverages, including errors and omissions, fidelity, guaranteed asset protection, and surety. This segment provides its insurance products to businesses, government, and other institutions in transportation, commercial construction, healthcare, education, retail and wholesale trade, forest products, energy, general manufacturing, and financial services industries. The Title Insurance Group segment offers lenders' and owners' title insurance policies to real estate purchasers and investors based upon searches of the public records. This segment also provides escrow closing and construction disbursement services; and real estate information products, national default management services, and various other services pertaining to real estate transfers and loan transactions. The Republic Financial Indemnity Group Run-off Business segment offers private mortgage insurance coverage that protects mortgage lenders and investors from default related losses on residential mortgage loans made primarily to homebuyers. It is also involved in the consumer credit indemnity run-off business. Old Republic International Corporation was founded in 1887 and is headquartered in Chicago, Illinois.

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